AI-driven innovations in IT and logistics outsourcing: enhancing LSP performance in the automotive sector

Abstract

The business landscape of today has been revolutionized, if not completely, by the advent of artificial intelligence (AI) in almost all the sectors concerning logistics and information technology (IT) of the automobile industry in particular, which are so vital. The combination of logistics outsourcing and IT with AI has enabled automobile manufacturers to enhance their operations optimally by reducing the costs and increasing the agility of the supply chain. The core functions like inventory planning, transportation management, warehousing planning, and supplier collaboration have led to a pathway in taking up decisions regarding build-to-order or purchase with Logistics Service Providers (LSPs) that has been rudimental. The study aims to investigate the impact of AIdriven innovations in IT and logistics outsourcing on LSP performance within the automotive sector. Specifically, it examines how AI adoption level, IT integration, supply chain risk mitigation, sustainability practices, and AIenabled collaboration influence LSP performance across five strategic levels: execution of essential operations, value-added services, inventory planning, distribution network design, and relationship management through the logistics outsourcing and IT, driven by AI impacting its LSP’s performance and transformative using survey data from 584 respondents. ANOVA test and other statistical test results indicate that LSPs with higher levels of AI and IT adoption are more likely to implement advanced logistics solutions and enhance the LSP’s performance.